Amazon.com Inc.
AMZN 2.01%
is legendary for trying to know everything about its customers. When it came to its entertainment unit and the executive in charge there, though, the company appears to have fallen down on the job.

Amazon Studios Chairman Roy Price abruptly resigned in mid-October after details emerged publicly of an alleged incident of sexual harassment.​ Since then, Amazon has made a series of management changes at the studio to address a range of concerns. Three of Mr. Price’s top lieutenants have been fired or left.

Interviews with current and former executives, as well as with producers who have worked with Amazon Studios, paint a picture of alleged misconduct by Mr. Price that goes well beyond the public allegations that appear to have played a role in his departure. In addition, business troubles were allowed to fester, some of these people said.

Mr. Price appeared inebriated at a number of professional functions, people who worked with him said, and Amazon executives had to help him into a cab on one occasion. He once suggested to a producer that they have an affair to help promote her series, and on two occasions made actresses so uncomfortable with his advances that colleagues had to move them away from him, said people who witnessed the events.

Some people in Hollywood also said they came to know Mr. Price as appearing aloof and often uninterested in the details of the multibillion-dollar business he ran for Amazon.

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People who work at Amazon are now asking how the Seattle giant let those issues build for so long.

The issues raise questions about the role of a core feature of Amazon’s business model, current and former executives said. The company gives divisions tremendous autonomy to maintain an innovative start-up culture. Because entertainment is so different from the rest of Amazon’s retail and engineering-focused operations, some of these executives said, Mr. Price enjoyed particularly wide leeway.

That allowed Amazon Studios—based near Los Angeles, far from headquarters—not only to run its business in a way that didn’t always hew to Amazon’s trademark obsession with controlling costs, but also to be tainted by a Hollywood culture in which norms of professional behavior are often ignored, some of these executives said.

In one case, when an allegation of misconduct against Mr. Price was brought to the attention of the parent company by producer Isa Hackett in 2015, Amazon conducted an investigation but didn’t appear to seriously discipline Mr. Price, people who worked with him at the time said. That led some inside the unit to believe complaints about the studio chairman wouldn’t lead to changes.

On Oct. 12 of this year, Ms. Hackett went public with allegations Mr. Price had sexually harassed her. Amazon placed the 51-year-old Mr. Price on leave that day. The next week, he resigned.

Amazon declined to make executives available for interviews. In a recent letter to studio employees, Mr. Price’s boss, Jeffrey Blackburn, wrote that “Roy’s resignation followed new information that surfaced last week” and that “we will use these events as an opportunity to review our sexual harassment policy and processes to ensure they are doing their job to provide a harassment-free workplace. And if they are not, we will make the necessary changes.”

Mr. Price’s lawyer, Eric George, said: “In a career spanning three decades, Roy Price has never once been accused of engaging in unwanted physical contact. Nor has he ever been accused of sexual harassment—with the sole exception of the incident alleged by Ms. Hackett, the portrayal of which he vigorously contests. Any attempt to equate Roy with other stories that have emerged recently in Hollywood is false and misleading.”

Just a week before Mr. Price’s exit, Mr. Blackburn, a Seattle-based Amazon senior vice president close to Chief Executive Jeff Bezos, said at a conference that the company had a “fantastic team” in Hollywood.

Two weeks later, visiting Amazon Studios following Mr. Price’s departure, Mr. Blackburn said, “We have to do better,” said a person present. People who have spoken to Mr. Blackburn said he appeared shocked by the revelations and disappointed that the trust he placed in the studio chief was violated.

Mr. Blackburn was aware of the 2015 investigation into Mr. Price’s conduct, said a person with knowledge of the probe.

Hollywood credentials

Amazon Studios isn’t a big revenue generator but plays an important role in attracting members to Amazon’s Prime service. It has quickly become one of the most prominent studios in Hollywood due to its big budget and record of critical success in a short time. It produces the Emmy-winning comedy “Transparent,” crime drama “Bosch” and reality show “The Grand Tour.” Earlier this year it won two Academy Awards for its film “Manchester by the Sea.”

Mr. Price arrived there with Hollywood credentials. The son of a former Columbia Pictures chairman, he spent about five years in the 1990s at
Walt Disney Co.
, where he supervised development of animated television series. He joined Amazon in 2004 and oversaw the company’s video-on-demand service from its Seattle headquarters. He returned to Southern California in 2014 as Amazon expanded its foray into original movie and TV production.

Mr. Price enjoyed a close relationship with Messrs. Blackburn and Bezos, several current and former executives said. He sometimes watched movies with Mr. Bezos at the CEO’s boathouse, one said.

Some former executives of Amazon Studios said what they saw as Mr. Price’s troubling behavior, including heavy drinking and inappropriate remarks, was apparent when he began spending more time in Hollywood and New York as Amazon ramped up its studio unit.

In 2013, at a dinner for the cast and producers of the political comedy “Alpha House,” Mr. Price drank excessively and made raunchy remarks to one of the show’s female co-stars, according to some attendees.

Mr. Price slurred his words and crudely propositioned the young actress, one attendee said. Another said Amazon executives tried to move the target of Mr. Price’s come-ons—Yara Martinez—away from him. At the end of the evening, he had to be helped to a cab by two Amazon executives, this person said. A spokesman for Ms. Martinez didn’t respond to a request for comment.

At another party later that year for the talent in Amazon’s shows, Mr. Price appeared inebriated and told a group of executives he was looking for a young actress to sleep with that night, said a person present.

Mr. Price disputes the two accounts of his behavior at the events, said a person close to him.

In July 2015, at a dinner with the cast and producers of the Amazon drama “Man in the High Castle,” Mr. Price was introduced to Ms. Hackett, a producer on the show and daughter of Philip K. Dick, author of the book on which the series is based.

During that evening, Mr. Price suggested he and Ms. Hackett “have an affair” to help promote the series. He then also bragged about his sexual prowess and grilled her about her lifestyle and made vulgar propositions, according to people who were present. Ms. Hackett confirmed this account.

Later Mr. Price told others at the party he thought Ms. Hackett liked him, people who were there said.

The morning after the incident, Ms. Hackett complained to two senior Amazon Studios programming executives, said one of the people familiar with the episode. Ajay Patel, the studio’s associate general counsel, was made aware of the incident, this person said. Mr. Patel declined to comment, Amazon said.

Amazon executives in Seattle brought in an outside investigator, Public Interest Investigations Inc., a few weeks later, people who took part in the probe said. Public Interest declined to comment.

Initially, Ms. Hackett wasn’t provided details about the investigation’s conclusion, said one of the people familiar with the episode. This past summer, Ms. Hackett again inquired and was told by Mr. Patel that Mr. Price was “counseled.” No other specific reprimands were described to her, this person said.

Some people familiar with the episode said Mr. Price was told to steer clear of Ms. Hackett and events involving the show, and to watch his drinking at events.

At last year’s Edinburgh Television Festival, where Mr. Price was a speaker, he repeatedly expressed interest in pursuing the actress Anna Friel, said a person present. At events with other industry executives, he asked multiple times where she was and whether she was attending. People close to Ms. Friel worked to keep the two of them separate because she was uncomfortable with his interest, this person said.

A spokesman for Ms. Friel declined to comment. The person close to Mr. Price said he disputed that account.

Frustration with Mr. Price extended to his demeanor in business. He often struck colleagues as aloof and disengaged, said some executives and producers who worked with him. It wasn’t unusual for him to come late to meetings and to scowl at whoever was speaking, even a top producer. Dana Calvo, creator of the 2016 Amazon series “Good Girls Revolt,” said Mr. Price didn’t know names of the characters or many other details about her show.

After Weinstein

That week, actress Rose McGowan criticized Mr. Price on Twitter for his ties to Mr. Weinstein, also directing complaints at Mr. Bezos. Amazon and Weinstein Co. were working together on two television shows.

Amazon canceled one series it was producing with Weinstein Co. that would have been directed by David O. Russell and featured Robert De Niro and Julianne Moore. It is seeking to end a relationship on another in which the independent studio had foreign rights, said people familiar with the discussions.

Under the original deal for the Russell show, Amazon would have to pay the director and stars and Weinstein Co. much of their fees for the first season of the show even after canceling it—totaling tens of millions—said people with knowledge of the contracts. Amazon is negotiating to lower those payments, said a person close to the discussions.

Screen Shot

Amazon made a big push into television and movies under its studio's chairman, Roy Price.